New York Markets After Hours

Transocean rises; energy stocks hold gains

BMO Capital Markets upgrades Nabors to outperform

By

SteveGelsi

NEW YORK (MarketWatch) — Transocean Ltd. led gains by oil service stocks on Monday, as the energy sector held on to positive territory despite an expected move by Standard & Poor’s to place all 17 euro-zone countries on credit watch negative.

The Wall Street Journal reported that the region could face a downgrade by the credit rating agency as it struggles to solve its debt problems.

Earlier, the sector rose on optimism around key meetings this week among European leaders. By the end of the session, gains were more modest.

The company drew a mention in a report by Barclays Capital that global spending on oil exploration and production will rise by 10% in 2012 to $600 billion.

“Transocean is, in our minds, an exceptional value at current levels and a stock with solid catalysts as liquidity and execution improve,’ Barclays analysts said in a note to clients.

Also moving up, Nabors Industries
NBR, +0.84%
rose 4.6% after BMO Capital Markets upgraded the oil service firm to outperform from market perform and raised its target price to $29 a share from $24.

“We believe NBR is one of the best value/corporate makeover stories in the group and its turnaround is about to accelerate,” analyst Alan Laws said in a note to clients.

Electric power firm Entergy Corp.
ETR, -0.39%
rose 4% after the company said it plans to spin off its transmission business and merge the unit with ITC Holdings Corp.
ITC, +3.92%

Entergy shareholders will hold 50.1% of the combined firm and ITC shareholders will own 49.9%.

Entergy owns about 16,000 miles of transmission lines in parts of the Southern U.S.

Royal Dutch Shell
RDS.A, +0.38%
executive Andy Brown told reporters at the World Petroleum Congress that the energy giant is considering the construction of a facility in the U.S. to convert natural gas to fuels like diesel.

Brown, who is executive vice president at Shell, said the company is “looking for places where gas is cheap and [oil] products are expensive,” according to a report by Dow Jones Newswires.

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